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Since the 1860s Brazilian economic history has been dominated by balance of payments shocks and spiralling inflation. Wide fluctuations in commodity prices, in the supply of foreign capital and also in the ability to attract foreign capital have seen recurrent fiscal shocks, high inflation, and foreign exchange depreciation. Protectionism has played a significant role in public policy and this has had a significant distributive impact when favouring selected groups of the population. Following Great Depression of 1928–32, high protection, quantitative import measures, and foreign exchange...

Since the 1860s Brazilian economic history has been dominated by balance of payments shocks and spiralling inflation. Wide fluctuations in commodity prices, in the supply of foreign capital and also in the ability to attract foreign capital have seen recurrent fiscal shocks, high inflation, and foreign exchange depreciation. Protectionism has played a significant role in public policy and this has had a significant distributive impact when favouring selected groups of the population. Following Great Depression of 1928–32, high protection, quantitative import measures, and foreign exchange controls, as well as discriminatory regulatory legislation significantly affected the volume and distribution of foreign investment. This chapter focuses on the impact of such fluctuations on the attractiveness or otherwise of the Brazilian market for foreign capital. Particular emphasis is placed on insurance and reinsurance companies, among other financial institutions, as the absence of major natural catastrophes have foregrounded the impact of economic instability on the insurance market.